Centre for Development Economics and Sustainability 5 Nov 2014 Dezenvolvimentu Ekonómiku iha Timor-Leste Brett Inder ▪ Katy Cornwell ▪ Gaurav Datt Centre for Development Economics and Sustainability

Introdusaun Aims Finansiamentu: Objetivu-sira: Programa Asisténsia hosi Governu Australia (Australian Aid Program) Objetivu-sira: Refleta ba Faze I Planu Estratéjiku Dezenvolvimentu Esplora papél dezenvolvimentu agríkola hodi redús pobreza no kria kreximentu ekonomia ida ne'ebé sustentável Aims

Planeamentu asaun hodi atinje objetivu ida-ne’e difisil: Planu Estratéjiku Dezenvolvimentu (SDP): “Atu sai nasaun ne'ebé ho rendimentu iha nivel médiu ba leten iha tinan 2030” ho populasaun ne'ebé saudavel, edukadu no seguru iha tinan 2030 Planeamentu asaun hodi atinje objetivu ida-ne’e difisil: - Iha prioridade barak mak kompete ba malu - Presiza liña koordenasaun iha area oioin - Inisiativa balun fó impaktu sosiál ne'ebé ladún ajuda Laiha ema ida mak iha resposta hotu! Ami iha ne’e atu rona no aprende, no ho haraik an refleta hosi perspetiva ema li'ur nian

SDP phases of implementation STRATEGIC DEVELOPMENT PLAN 2011-2030 “Vision :Timor-Leste to be an upper-middle income country by 2030” Long-Term 2021-2030 Short-Term 2011-2015 Mid-Term 2016-2020 FAZE I Human Resources Development Infrastructure Strategic Industries FAZE II Infrastructure Strengthening Human Resources Market Formation FAZE III Eradication of Extreme Poverty Strong Private Sector Diversified Non-oil Economy

FAZE I Dezenvolvimentu Rekursu Umanu Infra-estrutura Indústria ne'ebé Estratéjiku Prioridade tolu ne’e importante tebes ba Dezenvolvimentu ida ne'ebé susesu Infra-estrutura – buat hirak ne'ebé mak fasilita atividade ekonómiku. Maibé: sira rasik la'ós atividade ekonómiku (sustentável). Rekursu Umanu – pesoál ne'ebé bele aproveita oportunidade ekonómiku ne'ebé mak kria hosi infra-estrutura. Indústria ne'ebé Estratéjiku – infra-estrutura mesak de'it sei la to’o. Presiza akompaña ho “estímulu ba povu” (grass roots stimulus), ne'ebé fó target ba setór prioridade ne'ebé espesífiku.

Impaktu ba pobreza saida mak ita bele haree durante Faze I? Dezenvolvimentu Rekursu Umanu Infra-estrutura Indústria ne'ebé Estratéjiku Impaktu ba pobreza saida mak ita bele haree durante Faze I? Durante faze ida-ne’e, parese sei laiha impaktu boot ba Pobreza. Tansá? Investimentu iha kapital umanu no projetu infra-estrutura boot, fó impaktu uitoan de'it iha tempu badak. Impaktu balun ita bele haree hosi “indústria ne'ebé Estratéjiku” – agrikultura no manufatura. Maibé, agrikultura no manufatura mak área ne'ebé nia progresu difisil tebes atu atinje.

ho Presu ne'ebé konstante GDP la’ós Mina ho Presu ne'ebé konstante GDP la’ós mina ne'ebé Reál, jerálmente sa’e maka’as, maibé la'ós iha agrikultura no manufatura Total GDP la’os Mina Total Non-Oil GDP Agrikultura, Floresta & Peskas Agriculture, Forestry & Fishing Manufatura Manufacturing

manufacturing been slow? Why has growth in manufacturing been slow? Constraints Labor costs are relatively high and educational standards are poor Poor business climate Inflation was high from 2011 to 2013 likely pushing up costs for businesses Import duty rates are low and do not give an incentive to produce domestically Government has not yet identified specific sub-sectors (e.g. food processing, brewing etc) of manufacturing where Timor-Leste could compete Many of these issues are now being addressed Improving business climate; with introduction of SERVE (one stop shop) Inflation has fallen and access to education has improved CoM recently established a working group to review import duty and excise to encourage domestic production (without reducing overall domestic revenue) Ministry of Finance and ESCAP are undertaking study on economic diversification Evidence of sharp increase in number of international companies interested in investing in Timor-Leste

agricultural production been slow? Why has growth in agricultural production been slow? No detailed study has been done on this issue. But likely causes are: Poor Incentives Access to money in rural areas from pensions, remittances, labor on PDID schemes arguably means that there is less incentive to work long hours to produce food to sell Access to jobs and education in Dili may have encouraged urban migration of younger more productive farmers Importation of subsidized and non-subsidized international rice probably improves living standards but lowers domestic prices and production Limited Support Services Limited access to subsidized inputs (fertilizer), extension services and marketing Cultural Constraints Farmers may not regard main staple crops (rice and corn) as business opportunities Poor harvest in 2011 (due to heavy 2010 rains) and access to subsidized rice may have led to a shift in tastes away from corn toward rice Inefficient Investments Large scale investments in weir based irrigation schemes seem are unlikely to significantly increase production

Setór Agríkola Tansá mak setór ida-ne’e prioridade? Dezenvolvimentu kuaze sempre hahú hosi setór agrikultura – ne'ebé involve ema, no oinsá ema hirak ne’e hala'o nia moris. Dezenvolvimentu involve halo modernizasaun ba atividade ekonómiku iha setór agríkola no setór “urbanu” (manufatura, bens e servisu), no halo balansu entre setór hirak ne’e.

Hasa’e produsaun agríkola Ai-han aumenta: Ba merkadu Hamenus pobreza & hasa’e ekonomia Hasa’e produtividade agríkola Ba uma-kain Enerjia aumenta Edukasaun & saúde ne'ebé di'ak Hasa’e fornesimentu traballadór sira ne'ebé han di’ak saudavel, & edukadu ba setór sira seluk Hasa’e empregu iha setór manufatura & servisu-sira Traballadór ne'ebé barak Investimentu iha setór sira seluk Hasa’e input

Cambodia’s Story Kamboja nia Istória Kamboja iha istória balun ne'ebé hanesan ho Timor- Leste: Konflitu 1970-1999, tuir kedan ho prosesu konstrusaun ba Pas Populasaun porsentu 80 mak hela iha área rurál Barak liu mak agrikultura subsistensia (ho mistura fini no perfíl esporta ne'ebé diferente – barak liu iha Kamboja mak foos) Iha 2007, taxa pobreza mak porsentu 50.1 (porsentu 53.2 iha tinan 2004)

Cambodia’s Story Kamboja nia Istória

Cambodia’s Story: How did they do it? Kamboja nia Istória Oinsá sira bele halo? Investimentu Governu ba iha infra-estrutura báziku rurál (dalan, irrigasaun rurál no sst) Urbanizasaun uitoan de’it Produsaun fini (foos) kuaze dobradu (dua kali lipat). Ida-ne’e atinje liuhosi hadi’ak produsaun no espande área kultivasaun (budidaya pertanian) Sorte: Presu foos mundiál ne'ebé sa’e maka’as

Pobreza iha Timor-Leste Pobreza Konsumsaun, TLSLS 2007: Porsentu 49.9 mak iha liña pobreza konsumsaun nia okos

Pobreza Konsumsaun Konsumsaun nia Distribuisaun Lina Pobreza $0.88 Konsumsaun uma-kain, per kapita, per loron

How is Consumption Poverty Calculated? Oinsá mak ita kalkula Pobreza Konsumsaun? Adisiona (tambahkan) valór despeza uma-kain per kapita (atuál ka kalkulasaun) hosi kada: Nesesidade (eletrisidade nsst) Aluga uma Saúde Edukasaun Buat ruma ne’ebé família sosa (la'ós hahán) Hahán

Komponente Konsumsaun Uma-kain per kapita Components of Household per capita Consumption Lina Pobreza $0.88

Komponente Konsumsaun Uma-kain per kapita Lina Pobreza $0.88

Komponente Konsumsaun Uma-kain per kapita Components of Household per capita Consumption Eletrisidade nsst: 6c Aluga uma: 13c Saúde <1c Edukasaun 1c Sosa (la’ós hahán): 7c Hahán: Sosa 31c Totál per kapita Konsumsaun loroloron: 88c Totál Hahán: 61c (70%) Hahán: Fó ba malu 4c Hahán: Produsaun rasik 26c

Komponente Konsumsaun Uma-kain per kapita Components of Household per capita Consumption Eletrisidade nsst: 6c Saúde <1c Edukasaun 1c Sosa (la’ós hahán): 7c Hahán: Sosa 31c Komponente Kas/Osan: 45c

Osan / Kas Mai hosi Ne’ebé?

Osan / Kas Mai hosi Ne’ebé Where Does the Cash Come From? Populasaun Timor-Leste Uma-Kain ne’ebe Fa’an Kafe % Rendimentu Kas Decile Konsumsaun % Uma-kain Kafe iha Decile Populasaun ida-idak

Osan / Kas Mai Hosi Ne’ebé Rendimentu hosi Empregu Where Does the Cash Come From? Uma-Kain ho Rendimentu hosi Empregu Populasaun Timor-Leste % Rendimentu Kas Decile Konsumsaun % Uma-kain Empregu iha Decile Populasaun ida-idak

Saida mak bele ajuda hodi hasa’e uma-kain ba liña pobreza nia leten? Lina Pobreza $0.88 Konsumsaun nia Distribuisaun Konsumsaun uma-kain, per kapita, per loron

Kreximentu iha Agrikultura Simulasaun: Se Karik … ? Kreximentu iha Agrikultura Karik uma-kain agrikultura no kafé (populasaun porsentu 47) bele hasa’e sira nia produsaun… …Saida mak sei akontese ba taxa pobreza?

Kreximentu iha Agrikultura Taxa Pobreza entre uma-kain hirak ne’e Simulation: What if … ? Growth in Agriculture Simulasaun: Se karik … ? Kreximentu iha Agrikultura % Populasaun Taxa Pobreza entre uma-kain hirak ne’e Fa'an Ai-han (maibé la'ós kafé) 26 % 57 % Fa'an kafé (maibé la'ós fini) 5 % 63 % Fa'an Ai-han & Kafé 16 % 61 % Hotu iha Leten 47 % 59 %

Kreximentu iha Agrikultura Simulation: What if … ? Growth in Agriculture Simulasaun: Se karik … ? Kreximentu iha Agrikultura 2007 Atual Fa’an Produsaun Kiak 49.9% La Kiak La Fa’an Produsaun

Kreximentu iha Agrikultura Simulation: What if … ? Growth in Agriculture Simulasaun: Se karik … ? Kreximentu iha Agrikultura 2007 Atual Produsaun Dobradu (2x Lipat) Uma-kain ne’ebe Fa’an Fa’an Produsaun Fa’an Produsaun Kiak 49.9% La Kiak Kiak 37% La Kiak La Fa’an Produsaun La Fa’an Produsaun

Kreximentu iha Agrikultura Taxa Pobreza entre uma-kain hirak ne’e Simulation: What if … ? Growth in Agriculture Simulasaun: Se karik … ? Kreximentu iha Agrikultura % Populasaun Taxa Pobreza entre uma-kain hirak ne’e Kuda Ai-han 83 % 53 % Fa'an Ai-han 42 % 58 % La Fa'an Ai-han 41 % 48 % Kuda Ai-han &/ Kafe

Kreximentu iha Agrikultura Simulation: What if … ? Growth in Agriculture Simulasaun: Se karik … ? Kreximentu iha Agrikultura 2007 Atual Kuda Ai-han &/ Kafe Kiak 49.9% La Kiak La Kuda / Koilleta

Kreximentu iha Agrikultura Simulation: What if … ? Growth in Agriculture Simulasaun: Se karik … ? Kreximentu iha Agrikultura 2007 Atual Produsaun Hotu-Hotu Dobradu (2x lipat) Kuda Ai-han &/ Kafe Kuda Ai-han &/ Kafe Kiak 49.9% La Kiak Kiak 31% La Kiak La Kuda / Koilleta La Kuda / Koilleta

Kreximentu iha Agrikultura Simulasaun: Se karik … ? Kreximentu iha Agrikultura Hasa’e produsaun fini & kafé, bele atinje ka lae? Iha posibilidade ka lae, hodi fa'an produsaun sira ne’e hotu? Nato’on ona ka lae, hasa’e uma-kain ba liña pobreza nia leten? Iha konsekuensia / multiplier effects ka lae?

Kreximentu iha Empregu Simulation: What if … ? Growth in Employment Simulasaun: Se karik … ? Kreximentu iha Empregu Rata-rata, iha 2007 traballadór ne’ebé la'ós agrikultura hetan osan $100 kada fulan. Se karik ita hasa’e to’o dobradu (dua kali lipat) númeru uma-kain ho rendimentu empregu (hosi 22% ba 44%), no aloka rendimentu adisionál ida-ne’e ba uma-kain ne'ebé mak seidauk hetan rendimentu empregu … …Saida mak sei akontese ba taxa pobreza?

Kreximentu iha Empregu Taxa Pobreza entre Uma-kain hirak ne’e Simulation: What if … ? Growth in Employment Simulasaun: Se karik … ? Kreximentu iha Empregu % Populasaun Taxa Pobreza entre Uma-kain hirak ne’e Hetan Rendimentu hosi Empregu 22% 36.6% La Hetan 78% 53.5% Totál 100% 49.9%

Simulasaun: Se karik … ? Kreximentu iha Empregu Simulation: What if … ? Growth in Agriculture Simulasaun: Se karik … ? Kreximentu iha Empregu 2007 Atual Hetan Osan hosi Empregu Kiak 49.9% La Kiak La Hetan Osan hosi Empregu

Simulasaun: Se karik … ? Kreximentu iha Empregu Simulation: What if … ? Growth in Agriculture Simulasaun: Se karik … ? Kreximentu iha Empregu 2007 Atual Empregu Dobradu (2x lipat) Hetan Osan hosi Empregu Hetan Osan hosi Empregu Kiak 49.9% La Kiak Kiak 40% La Kiak La Hetan Osan hosi Empregu La Hetan Osan hosi Empregu

Oinsá mak bele Hasa’e Produsaun Agríkola? Ami observa aproximasaun tolu ne’ebé bele hala’o hamutuk: 1. Fó atensaun ba dezafiu-sira 2. Defini objetivu 3. Kria oportunidade

1. Fó atensaun ba Dezafiu-sira Identifika no fó atensaun ba dezafiu prinsipál sira. Por ezemplu …

agricultural production been slow? Why has growth in agricultural production been slow? No detailed study has been done on this issue. But likely causes are: Poor Incentives Access to money in rural areas from pensions, remittances, labor on PDID schemes arguably means that there is less incentive to work long hours to produce food to sell Access to jobs and education in Dili may have encouraged urban migration of younger more productive farmers Importation of subsidized and non-subsidized international rice probably improves living standards but lowers domestic prices and production Limited Support Services Limited access to subsidized inputs (fertilizer), extension services and marketing Cultural Constraints Farmers may not regard main staple crops (rice and corn) as business opportunities Poor harvest in 2011 (due to heavy 2010 rains) and access to subsidized rice may have led to a shift in tastes away from corn toward rice Inefficient Investments Large scale investments in weir based irrigation schemes seem are unlikely to significantly increase production

2. Objetivu, Responsabilidade & Target Aplikasaun ida ba Jestaun Bazeia ba Rezultadu (result-based Management) : Defini objetivu jerál no sub-objetivu ne’ebé detallada Fó responsabilidade klaru ba traballadór sira hodi servisu atinje objetivu hirak ne’e Defini target ne'ebé uza hodi sukat progresu Por ezemplu …

3. Establish targets Each goal, sub-goal and activity has a specific target LEVEL 1: Goals LEVEL 2: Sub- Goals LEVEL 3: Products & Services LEVEL 4: Activities Goal: Increase Agricultural Production Target: Sector growth of 5% per year Sub-Goal: Increase crop production Target: Annual production increased by % Product Increase staple food production Annual production of staple food increased by % Increase area cultivated with rice Target: rice Cultivated area increase to 57,000 ha Example of RMB applied to DPCM Economic Sector

3. Oportunidade iha Agrikultura Saida mak daudaun ne’e la'o di'ak? Saida mak bele transforma an no sai di’ak liu tan se hetan apoiu no enkoraja? 1. Programa dezenvolvimentu lokál rurál ne'ebé tau matan ba fornesimentu (supply chain) tomak. 2. Foka ba tipu produsaun no produtór sira ne'ebé mak iha produsaun ne’ebé barak liu (surplus) ba mekadoria agora daudaun. Foka mós ba sira ne'ebé iha poténsia boot ba mekadoria. 3. Fasilidade prosesamentu ai-han.

Sumáriu (1) Planu Estratéjiku Dezenvolvimentu (SDP) estabelese orientasaun balun ne'ebé luan, no estabelese prioridade- sira. (2) Difisil tebes atu atinje progresu iha area balun duke area sira seluk. (ezemplu Agrikultura, Edukasaun no setór privadu) (3) Redusaun boot iha pobreza bele atinje liuhosi kreximentu modestu iha setór ne’ebé iha kapitál umanu barak. (4) Ami haree katak dalan kapás ida mak foka ba apoiu no espande programa sira ne'ebé mak funsiona ka la'o ho di'ak ona.

Centre for Development Economics and Sustainability 5 Nov 2014 Dezenvolvimentu Ekonómiku iha Timor-Leste Brett Inder ▪ Katy Cornwell ▪ Gaurav Datt Centre for Development Economics and Sustainability